Final answer:
Digital shopping spending through credit and debit cards has increased substantially relative to pre-COVID-19 levels since March 2020. The pandemic has encouraged the transition to online shopping and the use of contactless payments. While this has not changed the quantity of money in the economy, it has significantly influenced consumer behavior and the retail environment.
Step-by-step explanation:
Since March 2020, due to the COVID-19 pandemic, there has been a pronounced shift in the behavior of consumers, with digital shopping spending through credit cards and debit cards increasing significantly. This transition was accelerated by a decrease in the use of physical currency and an enforced move towards contactless payments to mitigate the spread of the virus.
Retailers globally have been compelled to re-imagine the traditional retail experience, leading to a surge in online retail which offers a desocialized, efficient, and often contactless shopping alternative to traditional brick-and-mortar stores.
Traditional retail spaces, including restaurants and small retailers, faced severe revenue drops and closures. However, as businesses adapted and moved operations online, the use of credit and debit cards for online purchases rose. This increase continued even as the economy began to recover post-pandemic with various sectors such as groceries adopting Western-style shopping environments that further supported the use of electronic payments over cash transactions.
Nonetheless, it is crucial to note that while the use of credit and debit cards for transactions has become more prevalent, their adoption does not alter the overall quantity of money within the economy.
The rise in credit card debt observed over the years poses additional risks, highlighting the importance of consumer understanding and responsible credit usage. As the retail landscape continues to evolve, digital and electronic payments are playing a critical role in shaping the new shopping experience, both online and in-store.